Most of the initiation of ERM implementation start from internal audit since the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released its Enterprise Risk Management–Integrated Framework in September 2004. Based on COSO ERM, internal audit play an important role in monitoring ERM, but do NOT have primary responsibility for its implementation or maintenance. Internal audit assist management and the board or audit committee ONLY in the process of monitoring, evaluating, examining, reporting, recommending improvements. They support for establishing enterprise risk management groundwork in the organization and should be continued by the risk management group. The issue sometimes comes up from the transition from IA to RMG since it could be critical to ensure that the audit function takes on an appropriate level of responsibility for ERM.
Illustration below is described the linkage between the role of Risk Manager and Internal Auditor.
In regard to ERM implementation there are some roles that need to be applied with cautious by internal audit function such as facilitating identification and evaluation of risks, coaching management in responding to risks, coordinating ERM activities, consolidating the reporting on risks, maintaining and developing the ERM framework, championing establishment of ERM, developing risk management strategy for board approval.
Finally, the main role of RMG that cannot be undertake by IA are setting the risk appetite, imposing risk management processes, management assurance on risks, taking decisions on risk responses, implementing risk responses on management’s behalf, accountability for risk management. ©DC_2009